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March 27, 2015

Homework Help: Economics - Please Help

Posted by BC on Tuesday, July 6, 2010 at 11:19pm.

Suppose the economy has been producing its potential, but it is now experiencing a recession. Which of the following is a discretionary fiscal policy that would bring the economy closer to its potential output? Check all that apply.

1) A tax cut
2) A tax increase
3) The sale of bonds by the Fed
4) An additional $10 billion in spending on agricutural subsidies

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